Swinging for the Fences: How the Market Economy Shapes Our Destiny

The market system — or “free enterprise economy” – is a marvelous mechanism. But it is not as purely beneficent as the market ideologues claim. One such ideologue, the late Milton Friedman, wrote a famous book with the title Free to Choose. He argued that if we get the government out of the way, and allow the market to function unimpeded, the free choices of individual human beings will control our economic destiny and lead to optimal outcomes for society taken as a whole.

I refuted that claim in a book with the title The Illusion of Choice. In that book, I argued that the market is great at some things, but lousy at others. And that it’s blind spots need to be corrected to get any kind of optimal outcome.

As in The Parable of the Tribes, and in contrast with the approach Friedman took, I examined not a snapshot of a particular moment of economic activity but rather a longer term time-elapsed film of how the society develops over stretches of time.

I showed that if a society fails to correct for the blind spots of the system, it will inevitably move, over time, into a future that is determined not by the choices of the people of that society but by the inherent logic of that powerful economic system.

In our world, particularly with our economic system being able to empower its agents to shape so powerfully the thinking of our citizenry, the defects of the market system are quite inadequately corrected for. The market economy is therefore one of the important “magnets” that pull us toward a future not of our choosing.

One more important point: in The Illusion of Choice, I frame my refutation on the supposition that the market is working just the way it is supposed to. I ignore, therefore, the whole problem of power for individuals and organizations within the system, and focus only on the power of the system itself.

Two problems I ignore in my critique (they’re important, but I chose to show the limitations of the market even when it works as its ideologues propose):

1) The problem of “market power,” like huge corporations that can render the system uncompetitive. I grant what isn’t true that we’re dealing with buyers and sellers in such abundance, and dealing with commodities so indistinguishable, that no one is able to bully or coerce anyone else, or get any kind of monopolistic corner on the market.

2) I ignore the reality that the inequalities that grow out of our economy lead to inequalities of political power. I ignore the problem that our market economy corrupts our political system with its ideal of the equality of “one person, one vote.”

Even ignoring these problems, the market economy — unless adequately corrected by collective, political decisions democratically arrived at-really does shape our destiny, in some ways that serve human welfare but also in some ways injurious to it.

Here’s a passage from the jacket copy of The Illusion of Choice:

“[T]he market system unfolds according to a logic of its own, shaping everything within its domain — the landscape, social institutions, even human values — to serve its own inherent purposes… “The market attends well to some dimensions of human life and does not even see others. It is sensitive to those values pertaining to what can be bought and sold but is blind to others — such as the integrity of the natural world and the quality of human relationships — that cannot be turned into commodities. It is impervious to the costs of tearing apart the larger wholes — families, communities, the biosphere– that are vital to the quality of our lives. “[M]ainstream economics takes too static a perspective. Systematic errors wreak damage over time.”

In the next round regarding these systemic forces, I will put some more flesh on this idea that the uncorrected market economy takes choices away from us as importantly as it makes us “free to choose.”